eBay(US:EBAY)2025-05-01 20:05Financial Performance - eBay's net revenues for Q1 2025 were $2,585 million, a slight increase of 1.1% compared to $2,556 million in Q1 2024[20] - Gross profit for Q1 2025 was $1,862 million, up from $1,856 million in Q1 2024, reflecting a stable gross margin[20] - Operating income decreased to $616 million in Q1 2025 from $631 million in Q1 2024, indicating a decline of 2.4%[20] - Net income for Q1 2025 was $503 million, representing an increase of 14.9% from $438 million in Q1 2024[20] - Basic net income per share rose to $1.08 in Q1 2025, compared to $0.85 in Q1 2024, marking a growth of 27.1%[20] - Total net revenues for the first quarter of 2025 were $2,585 million, slightly up from $2,556 million in the first quarter of 2024, indicating a 1.1% increase[51] - Marketplace revenues decreased to $2,143 million in Q1 2025 from $2,172 million in Q1 2024, a decline of 1.3%[51] - Advertising revenues increased significantly to $442 million in Q1 2025, up from $384 million in Q1 2024, marking a 15.1% growth[51] - Operating margin decreased to 23.8% for the three months ended March 31, 2025, down from 24.7% in the same period in 2024[168] Assets and Liabilities - Total assets decreased to $18,954 million as of March 31, 2025, down from $19,365 million at the end of 2024[18] - Total liabilities decreased to $14,004 million as of March 31, 2025, compared to $14,207 million at the end of 2024[18] - Cash and cash equivalents increased to $3,031 million as of March 31, 2025, up from $2,433 million at the end of 2024[18] - The company reported total cash, cash equivalents, and restricted cash of $4,156 million as of March 31, 2025, compared to $2,661 million a year earlier, reflecting a 56.1% increase[28] - Total debt decreased to $6,745 million as of March 31, 2025, down from $7,425 million as of December 31, 2024, reflecting a reduction of approximately 9.2%[121] Cash Flow and Investments - Cash flow from continuing operating activities was $787 million for the three months ended March 31, 2025, compared to $615 million in the same period in 2024[168] - Cash provided by continuing investing activities was $1.3 billion in Q1 2025, mainly from $4.6 billion in investment maturities, offset by $3.0 billion in investments and $143 million in property and equipment[209] - Cash used in continuing financing activities totaled $1.2 billion in Q1 2025, including $800 million for senior notes repayment and $615 million for common stock repurchase[210] - The company had cash and cash equivalents of $6.2 billion as of March 31, 2025, down from $7.2 billion at the end of 2024, excluding customer-related cash[212] Stock and Dividends - eBay repurchased $630 million of common stock during Q1 2025, compared to $503 million in Q1 2024[25] - The company declared dividends of $0.29 per share in Q1 2025, up from $0.27 per share in Q1 2024[25] - The company paid $134 million in cash dividends in Q1 2025, compared to $139 million in Q1 2024, with a declared dividend of $0.29 per share for June 2025[148] - The stock repurchase program resulted in the repurchase of shares valued at $625 million, reducing the remaining authorized amount to $2.673 billion[146] Expenses and Costs - Cost of net revenues increased to $723 million, a 3% rise from $700 million in 2024, representing 28% of net revenues[186] - Operating expenses totaled $1,246 million, a 2% increase from $1,225 million in the same period of 2024[190] - Sales and marketing expenses decreased by 1% to $536 million, remaining at 21% of net revenues[190] - Product development expenses rose by 3% to $362 million, maintaining 14% of net revenues[190] - General and administrative expenses increased by 10% to $261 million, now accounting for 10% of net revenues[190] Tax and Regulatory Matters - The income tax provision for the three months ended March 31, 2025, was $129 million, with an effective tax rate of 20.4%[205] - The company expects to reduce the gross amount of unrecognized tax benefits by at least $170 million within the next 12 months[155] - The company entered into a settlement agreement with the DOJ, paying $59 million to resolve allegations of noncompliance under the Controlled Substances Act[135] Market Performance - Net revenues from the United States were $1,346 million in Q1 2025, up from $1,302 million in Q1 2024, indicating a growth of 3.4%[52] - The United Kingdom's net revenues decreased to $331 million in Q1 2025 from $390 million in Q1 2024, reflecting a decline of 15.1%[52] - Gross Merchandise Volume (GMV) for the same period was $18,753 million, reflecting a 1% increase compared to $18,623 million in 2024[182] - The take rate for the three months ended March 31, 2025, was 13.78%, up from 13.72% in the previous year[182] Foreign Exchange and Derivatives - The company uses foreign currency exchange contracts to mitigate the volatility of cash flows related to foreign currency exchange rates, with contracts generally lasting from one month to one year[78] - As of March 31, 2025, the estimated net derivative losses related to foreign exchange cash flow hedges amount to $24 million, while net derivative gains related to interest rate cash flow hedges are $8 million, expected to be reclassified into earnings within the next 12 months[80] - The total fair value of derivative instruments decreased from $79 million as of December 31, 2024, to $50 million as of March 31, 2025[87] Legal and Compliance - Legal and regulatory proceedings did not result in material losses as of March 31, 2025, and the company has accrued estimated liabilities where losses are probable[139] - The company recognized a pre-tax charge of $99 million related to workforce reduction plans approved in the fourth quarter of 2023[160] Economic Outlook - The company anticipates that seasonal trends in net revenues will be influenced by macroeconomic conditions and the introduction of new products[175] - Geopolitical events and economic uncertainties have increased borrowing costs and may adversely affect the company's financial condition and liquidity[213] - Fixed contractual obligations and commitments may vary due to changes in business needs and other factors, leading to uncertainty in payment timing and amounts[214]